Exploring Episode-Based Approaches for Medicare Performance Measurement, Accountability and Payment Final Report. Specifications for Creating Medstat Records


Regardless of whether a Medicare claim comes from an institutional or non-institutional source, the MEG grouper accepts one input record per claim. Medstat primarily relies on diagnosis codes for grouping, thus all available diagnosis codes from a claim are included on a Medstat record.  This record distinguishes IP and PB claims from other types of Medicare claims, but it does not differentiate among the other distinct types of Medicare claims as the source of diagnoses.  Switching claims from one of these types to another results in no change in constructed episodes.  An input record accepts data on procedure codes appearing on the claim (not revenue center codes).  This procedure information is primarily used to determine whether a claim represents an x-ray/lab event—which cannot start an episode—and in some instances to assist the grouper in deciding how to interpret secondary diagnoses on the claim.

When inputting files into Medstat, we configure the software's options either to their defaults or to the settings most parallel to Symmetry.  The episode length limit in Medstat's configuration file is set to make it comparable to Symmetry's episode limit of 365 days, and the chronic episode length is set to a year so as to construct chronic episodes that are comparable to Symmetry's annually truncated episodes.  We also configure the grouper to divide some chronic MEGs into chronic conditions and acute flare-ups.  Finally, we create inpatient stays, or admissions, from IP claims using Medstat's Build Admissions feature, which is similar in design to Symmetry's link facility records feature.  These admissions are then used to group the episodes; every claim in a given admission will always be placed into the same episode of care. 

In addition to the standard grouper configuration options, we rely on an adaptation of Medstat's software that groups all claims concurrent with an IP stay into the same episode as the IP claim.  MaCurdy et al. (2008) refer to this adaptation as the “All Services Admissions Build.”    We selected this approach for running the Medstat grouper to mimic some common payment patterns observed in Medicare data.  Medicare pays for near-daily Evaluation & Management (E&M) services by a physician during a hospital admission, and post acute care in the form of SNF claims, which must closely follow and be directly linked to a related IP stay.  Inspection of claims submission patterns in Medicare data clearly reveals the influence of these payment practices.    By using the “All Services Admissions Build” adaptation of the Medstat grouper, one ensures that relevant Part B physician claims concurrent with a hospital stay are grouped into the same episode as the IP claim paying for this stay, and, further, that a SNF claim immediately following this stay is also grouped to the same episode.  Although the “All Services Admissions Build” adaptation offers a mechanism for guaranteeing the bundling of relevant claims into the same episode, this feature represents a philosophical shift in the meaning of an episode in the sense that claims issued during an IP stay are no longer grouped according to diagnosis but are instead grouped merely on the basis of whether their dates fall within the IP admission.  When grouped on the basis of diagnoses, the Medstat software assigns many claims concurrent with a hospital stay to episodes different from IP claim, which more closely corresponds to the grouping results produced by Symmetry.

Unlike Symmetry, which groups service-level items, Medstat groups claim-level items.  This is an important distinction for cost allocation.  Specifically, whereas services from a parent claim can be grouped to multiple episodes by Symmetry, claims are always grouped to a single episode by Medsat.  As a result, the complete cost from an IP claim is always assigned to a single Medstat episode.

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